Corporate Meetings for Private Limited Companies (Sdn Bhd)

Companies in Malaysia are required to hold corporate meetings which is the shareholders and directors meetings. Minutes should be maintained for each of these meetings. The Company Secretary of the company is normally responsible to document these meetings.

It is important that key decision making process of the company is documented. There is no need to document small routine decisions made by the company BUT there should be written minutes or consent resolutions for decisions or events that require formal approval by the board of directors or shareholders.

What are directors' meetings?

The directors are elected to run and manage the affairs of the company. It is important that major decisions made by directors are documented at meetings. In some cases, one of the directors may be delegated to transact certain businesses and this should be done by way of convening a board meeting or by directors' circular resolution.

What are matters discussed at directors' meetings?

The Articles of Association regulates the proceedings of directors meetings. There should be at least two directors present for the meeting to proceed.

The following are common matters discussed at directors' meetings:

Recommending dividends

Transfer of shares

Appointment or resignation of directors

Direction of company such as developing a new product or additional capital required

Performance of company

Others

What are shareholders meeting?

There are three types of shareholders meetings:

Annual General Meeting (AGM)

Extraordinary General Meeting (EGM)

Class Meeting

What is an annual general meeting?

Shareholders are required to have at least an annual general meeting.

The Companies Act, 1965 requires the following:

The first AGM of the company must be held within 18 months of its incorporation

An AGM must be held in each calendar year

An must not be held more than 15 months after the last AGM

However, as the financial statements of the company needs to be presented within a period of 6 months before the AGM, the company would have to hold its AGM within 6 months from its financial year.

The authority to convene an AGM is usually with the board of directors. Shareholders must receive written notification of this meeting and 14 clear days notice is sufficient unless the M&A (byelaws) of the company require a longer period. However, if there are any special resolutions (special business) to be passed, then 21 clear days notice must be given.

What is the purpose of an AGM?

The Companies Act, 1965 prescribes certain matters to be conducted at the AGM. This include:

The audited accounts of the company must be laid before the company at the AGM. The Companies Act does not require the members to approve or adopt the accounts BUT to consider the accounts. The purpose for the audited accounts to be laid before the AGM is to enable shareholders to seek clarification from directors on any questions regarding the performance and affairs of the company.

Consider the report of directors.

The appointment of auditors and fixing of auditors fees. The shareholders may allow the directors of the company to fix the auditors fees.

Election of directors in place of those retiring.

Declaration of a final dividend (if any) recommended by the directors.

Other matters can also be discussed at the AGM, however prior notice needs to be given and these other businesses are normally classified as special businesses.

What is an EGM?

An extraordinary general meeting is convened to transact special business that is too urgent to wait until the next AGM.

The Memorandum and Articles of a company may allow the directors to convene an EGM. The members of the company may also convene an EGM on requisition provided that the member calling for the EGM holds not less than 10% of the paid-up capital that has the right to vote at the general meeting. The directors of the company upon receiving the requisition should give notice to convene the EGM. However, if the board fails to convene the EGM, the members themselves representing more than half of the total voting rights may themselves convene the EGM.

What is a class meeting?

Class meetings are meetings held for holders of a class of shares for companies that issues different classes of shares. Class meetings may be held for situations concerning variation of rights and privileges attached to the class of shares.